ACIT, New Delhi V. M/s. ISR Exports Pvt. Ltd., New Delhi

ITA 4685/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8996 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 01-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA M BISWAS
• Keywords: Additional evidence
• Section: 143(3); 201; 13; 68; 144

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C: NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K.N.CHARY, JUDICIAL MEMBER ITA NO. 4685/DEL/2016 (ASSESSMENT YEAR: 2012 - 13 ) ACIT, CIRCLE - 12(2), NEW DELHI VS. ISR EXPORTS PVT.LTD, 17, NORTH WEST AVENUE, PUNJABI BAGH, NEW DELHI PAN: AABCI8032N (APPELLANT) (RESPONDENT) REVENUE BY : MS. PARAMITAM. BISWAS, CIT DR ASSESSEE BY: NONE DATE OF HEARING 14/10 / 201 9 DATE OF PRONOUNCEMENT 1 3 / 0 1 / 2 0 2 0 O R D E R PER PRASHANT MAHARISHI, A. M. 1 . THIS IS AN APPEAL FILED BY THE LD ACIT AGAINST THE ORDER OF THE LD CIT(A) - 4, NEW DELHI DATED 27.06.2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY AMOUNTING TO RS. 2,00,00,000/ - . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF TRADE PAYABLES AMOUNTING TO RS. 11,16,16,482/ - . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE OF EXPENSES AMOUNTING TO RS. 50,53,407/ - . 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE DURING THE APPELLATE PROCEEDINGS. 3 . THE FACTS SHOWS THAT THE ASSESSEE IS A COMPANY WHO FILED RETURN OF INCOME ON 27.09.2012 SHO WING INCOME OF RS. 4775080/ - . THE ASSESSMENT U/S 143(3) READ WITH SECTION 144 OF THE ACT WAS MADE OF RS. 141445329/ - . THE LD AO MADE AN ADDITION OF RS. 2 CRORES ON ACCOUNT SHARE APPLICATION MONEY AS THE ASSESSEE DID NOT GIVE ANY INFORMATION. THE AO FURTHER MADE AN PAGE | 2 ADDITION OF RS. 111616842/ - ON ACCOUNT OF INCREASE IN TRADE PAYABLE U/S 68 OF THE ACT. THE ASSESSEE DID NOT FURNISH ANY INFORMATION ABOUT THE TRADE PAYABLES. THE ASSESSEE INCURRED CERTAIN EXPENSES AMOUNTING TO RS. 10106813/ - FOR WHICH THE DETAILS WERE NOT SUPPLIED . THE LD AO DISALLOWED 50% OF SUCH EXPENDITURE. 4 . ON APPEAL BEFORE THE LD CIT(A), HE DELETED THE ADDITION OF RS. 2 CRORES. BEFORE HIM THE ASSESSEE SUBMITTED THE LEDGER ACCOUNT, INCOME RETURN , COPY OF THE BANK STATEMENT OF LENDER . THE ABOVE S UM WAS RECEIVED FROM THE DIRECTOR OF THE COMPANY MR. INDERPAL SINGH WADHWAN . THE LD CIT(A) HELD THAT AS THE ASSESSEE HAS SHOWN THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION THE ADDITION WAS DELETED. WITH RESPECT TO THE INCREASE IN CREDITORS, ASSESSEE SUBMITTED CONFIRMATION AND PAN OF THE CREDITORS. THE LD CIT(A) DELETED THE ADDITION AS BOOK RESULTS I.E. GROSS PROFIT , WHERE THESE CREDITORS ARE ARISING , WAS ACCEPTED. WITH RESPECT TO THE EXPENDITURE THE COMPLETE DE TAILS WERE FILED SO HE DELETED THE ADDITIONS. THEREFORE, ALL THE ADDITIONS WERE DELETED BY THE LD CIT(A), HENCE, THE L D AO IS IN APPEAL. 5 . DESPITE NOTICE TO THE ASSESSEE NON APPEARED, HENCE, THE APPEAL IS DECIDED ON THE MERITS OF THE CASE , IN ABSENCE OF ASS ESSEE , AS PER AVAILABLE INFORMATION . 6 . THE LD DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD AO ON ALL THESE THREE COUNTS. ON GROUND NO. 4 SHE SUBMITTED THAT AO DID NOT GET OPPORTUNITY TO EXAMINE THE ADDITIONAL EVIDENCES. 7 . WE HAVE CAREFULLY CONSIDERED THE CON TENTION OF THE LD DR AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. AT THE OUTSET IT IS TO BE NOTED THAT THE LD CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE FOR THE REASON THAT HE HAS ASKED FOR THE REMAND REPORT FROM THE LD AO. THE LD AO DID NOT REPLY TIL L 08.06.2016 BUT THE LD AO REFERRED THE MATTER TO ANOTHER AO. IN PARA NO. 5 THE LD CIT(A) NOTED THAT 1 MONTHS IS A SUFFICIENT TIME FOR THE AO TO RESPOND TO ADDITIONAL EVIDENCE. THE LD AO DID NOT SUBMIT THE REMAND REPORT AND THEREFORE, HE ACCEPTED THE ADD ITIONAL EVIDENCE. IN ABSENCE OF ANY RESPONSE FROM THE LD AO , THE LD CIT(A) ADMITTED THE ADDITIONAL EVIDENCE , NO INFIRMITY CAN BE FOUND IN HIS ORDER . THEREFORE, GROUND NO. 4 OF THE APPEAL IS DISMISSED. PAGE | 3 8 . WITH RESPECT TO GROUND NO.1 , THE LD CIT(A) NOTED THAT SUM OF RS. 2 CROES HAVE BEEN RECEIVED FROM THE DIRECTOR OF THE COMPANY SHRI INDERPAL SINGH WADHWAN. THE MONEY IS PAID FROM M/S. D N K CREATION WHO WAS HAVING FUND TO SUBSCRIBE TO T HE SHARE CAPITAL. THE ASSESSEE SUBMITTED THE LEDGER ACCOUNT, INCOME TAX RETURN S AND THE COPY OF THE BANK STATEMENT OF THE DIRECTOR EVIDENCING THE PAYMENT FOR SUBSCRIPTION TO SHARES. THEREFORE, AS PER PARA NO. 8 OF THE APPELLATE ORDER THE LD CIT(A) DELETED THE ADDITION AS ASSESSEE HAS DISCHARGED ITS ONUS SHOWING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE ABOVE SHARE APPLICATION MONEY. THE LD CIT(A) ALSO NOTED THAT INDERPAL SINGH WADHAWAN HAS FILED HI S RETURN OF INCOME AND BANK STATEMENT WITH TWO DIFFERENT BANKS. MONEY WAS RECEIVED THROUGH RTGS. ASSESSEE HAS PROVED THE IDENTITY OF THE SHARE HOLDER SHOWING, PERMANENT ACCOUNT NO AND WARD , WHERE HE IS ASSESSED. HE IS ALSO THE DIRECTOR OF THE COMPANY , FILE D A HIGH RETURN OF INCOME. IN VIEW OF ABOVE FINDINGS , THERE IS NO INFIRMITY IN THE ORDER OF THE LD CIT(A) IN DELETING THE ABOVE ADDITION. THEREFORE, WE CONFIRMED THE FINDING OF THE LD CIT(A) IN DELETING THE ABOVE ADDITION AND DISMISSED GROUND NO. 1 OF THE APPEAL. 9 . GROUND NO. 2 IS WITH RESPECT DELETION OF THE ADDITION ON ACCOUNT OF TRADE PAYABLE OF RS. 111616842/ - . VIDE P A RA NO. 9 THE LD CIT(A) , HE NOTICED THAT FOUR CREDITORS HAVE ADVANCED IN RESPECT OF EXPORT OF GOODS AND FILED THEIR CONFIRMATION. COPY OF F OREIGN INWARD REMITTANCE , INVOICES AND BILLS WERE ALSO SHOWN. THEREFORE, THE ADDITION TO THE EXTENT OF THOSE FOUR CREDITORS WAS DELETED. FOR O THER CREDITORS , HE NOTED THAT THESE ARE BUSINESS CREDITORS WITH WHOM REGULAR TRANSACTIONS OF PURCHASE AND SALES AR E MADE. HE RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN 2 TAXMANN.COM 134 FOR THE PROPOSITION THAT SUNDRY CREDITORS CANNOT BE ADDED U/S 68 OF THE ACT AFTER THE PURCHASE ARE ACCEPTED. THERE IS NO INDICATION THAT CREDITORS ARE BOGUS AND GROSS PROFIT RATIO OF THE ASSESSEE WAS NOT DOUBTED. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) IN DELETING THE ADDITION OF RS. 1116165842/ - ON ACCOUNT OF SUNDRY CREDITORS. ACCORDINGLY, GROUND NO. 2 OF THE APPEAL IS DISMISSED. 10 . AS PER GROUND NO. 3, WITH RESPECT TO THE DISALLOWANCE OF THE 50% OF THE EXPENDITURE OF SALARY, BANK INTEREST AND OTHER EXPENDITURE , THE LD CIT(A) NOTED IN P A RA NO. 10 THAT ASSESSEE HAS SUBMITTED COMPLETE DETAILS OF THESE PAGE | 4 EXPENSES. IN FACT INTEREST HAS BEEN SUPPORTED BY THE BANK STATEMENT OF VARIOUS BANKS. THE INTEREST EXPENDITURE HAS HELD BY THE LD CIT(A) AS INCURRED FOR THE PURPOSE OF THE BUSINESS. WITH RESPECT TO OTHER EXPENSES , HE NOTED THAT THESE ARE TELEPHONE EXPENSES , PROFESSIONAL FEES AND STAFF CLAIMS. ON EXAMINATION OF THE DETAILS , HE FOUND THAT INTEREST PAID ON TAX DEDUCTION AT SOURCE IS NOT ALLOWABLE. THEREFORE, EXCEPT TO THAT EXTENT, HE DELETED THE DISALLOWANCE AS THE DISALLOWANCE MADE BY THE LD AO WAS ON AD HO C BASIS. ON CAREFULLY EXAMINATION OF THE ORDER OF THE LD CIT(A) , WE DO NOT FIND ANY INFIRMITY THEREIN. THEREFORE, GROUND NO. 3 OF THE APPEAL IS DISMISSED. 11 . ACCORDINGLY, APPEAL OF THE AO IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 / 0 1 / 2 0 2 0 - SD/ - - SD/ - ( K.N.CHARY ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 0 1 / 2 0 2 0 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI